Government Economic Cabinet Gives Details on 2021 Budget to Deputies
9 octubre 2020


On October 2, Ministry of Economy officials continued discussing the 2021 General Budget. The Secretary of Economic Policy Haroldo Montagu, the Secretary of Finance Raul Rigo and the Secretary of Finance Diego Bastourre participated in the Budget and Finance Committee.

At the beginning of the meeting, the Secretary of Finance said that “the budget bill foresees a robust recovery of collection levels.” Regarding the tax reform being studied, Raúl Rigo indicated that “it is based on principles of fiscal sustainability and progressiveness; slanted towards production and employment; making our tax system and federal coordination simpler and more efficient to use.” He added that “the reform seeks to strike a balance between the national tax structure and that of each provincial jurisdiction.”

As for Science and Technology, he said that “the budget has a real increase of 6.5 % with respect to 2020,” adding that “Education, Science and Technology are a priority for the government.”. In relation to economic recovery, he indicated that this “will depend on productive dynamism,” and added that “our priority is for capital spending to double in terms of GDP compared with 2019.”

The Secretary of Economic Policy said that a “conservative” scenario of growth has been built in order to appear “modest and credible” and that they envisage a “growth rate of 5.5% of GDP.” “There are economic sectors that will recover little by little,” he added. He indicated “we believe that the effects of the pandemic are not permanent, but will persist over the coming year”. As for inflation, he said “there is a slowdown compared with last year and we expect to close 2020 with an inflation of 30%.”

Diego Batourre indicated that “by the end of 2019 the debt-to-GDP ratio had climbed to 89.4%. When we refer to foreign currency securities, the universe of total debt represented is 24%, local law foreign currency securities 15%, while local currency securities represented 13%, and multilateral and bilateral securities 11%.” In reference to the provinces, he stated that “the 90 day negotiation period with the provinces for their debts regarding the Sustainable Guarantee Fund has not yet begun.”

Finally, Committee chairman Carlos Heller (Frente de Todos – ruling party) thanked the officials saying that “we have received information that will be very useful in our discussions to achieve a better budget law.”

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